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Marketing Workshop

John M Greening

Learning Through Doing


• Staying Relevant - Consulting
– A. G. Edwards – St. Louis
– Google – Chicago
– Owner Angel - Minneapolis
– Henkel Consumer Products – Cleveland
– Vibes Media - Chicago
• Board Membership
– Medialink – NY
– Visible World – NY
– Consumer Innovation Partners – Cleveland
– Music To Go – New York
– Advanced Circulatory Systems - Minneapolis
Agenda

• Introductions
• Marketing Presentation (11:00-11:30)
(11:00 11:30)
• Q&A Interaction (11:30-12:00)
• Team Breakout and Working Lunch (12:00-1:00)
(12:00 1:00)
• Group Presentations and Feedback (1:00 – 2:00
PM)
• Q & A and Feedback (2:00)
Intuition Shorthand

• “Knowing for sure without knowing for


certain ”
certain.

• “An
An inner way of knowing.
knowing ”

• “Subliminal
Subliminal self-communication.
self-communication ”
INTUITION - a direct knowing without conscious
reasoning.

• It DOES NOT denote something contrary to reason,


but rather something
g outside the p
province of reason.

• Intuition provides the spark that ignites the creative


process People who are highly intuitive function best
process.
in complex, rapidly changing situations. They like to
wrestle with the unknown and to choose among
alternatives that are all backed by good arguments
arguments.

• They thrive when facing a high level of uncertainty,


when time is limited, and when precedent is lacking.
Inhibitors of Intuition

• Fear
• Stress
• Pain
• Boredom
d
• Fear of Failure
CREATIVITY
• A response will be judged as creative a) to
the extent that it is both novel and
appropriate, useful, correct or valuable
response
p to the task at hand b)
) that the task
is heuristic rather than algorithmic.
• Heuristic means a hit or miss process
(learning by doing) while an algorithm is a
mechanical rule for solving a problem or
dealing with a situation.
situation
CREATIVITY
• A Heuristic process provides no clear path
for solutions which makes intuition rather
than logic the preferred method of deciding
which course to take.

• Therefore, “Creativity isn’t a destination it’s


a journey.” It’s the process that is ignited by
the spark of intuition. Remember, it is NOT a
personality or individual trait as many
believe.
Innovation

• Bringing creativity to Life / Making an idea


real

• Value = Usefulness / Uniqueness /


Sustainability

• The Essence of Corporate Creativity


Innovation: 2007
• Today, innovation is about much more than new
products. It is about reinventing
p g business
processes and building entirely new markets that
meet untapped customer needs. Most important,
as the Internet and globalization widen the pool
of new ideas, it's about selecting and executing
the right ideas and bringing them to market in
record time.
The Right idea + The Right
time + The Right Audience +
The Right Marketing
(
(Channel/Price/Promotion/
/ / /
Message / Support)
+ The
Th Right
Ri ht amountt off luck
l k=

SUCCESS
BW Innovation Survey
• The No. 1 obstacle, according to our survey
takers, is slow development times. Fast-changing
consumer d demands,
d global
l b l outsourcing,
t i and
d
open-source software make speed to market
paramount today.
p y
• Indeed, a lack of coordination is the second-
biggest barrier to innovation, according to the
survey's
survey s findings. But collaboration requires
much more than paying lip service to breaking
down silos. The best innovators reroute reporting
lines and create physical spaces for collaboration.
collaboration
They team up people from across the org chart
and link rewards to innovation. Innovative
companies build innovation cultures.
cultures
Is There a Gene
for Entrepreneurs?

• Mark Veeder, co-founder and creative director of


Event Q
Quest in New York City y and co-owner and co-
creator of the River Market in Barryville, N.Y.:

• I think entrepreneurs
p are definitely
y born. Even though
g "the
making of an entrepreneur" is a huge business in this
country with Tony Robbins and the rest, I think those
programs try to systematize the mind of the entrepreneur,
which is impossible
impossible. My feeling is that entrepreneurs are a
rare mix, the perfect storm of creativity, talent, confidence,
personality, drive, intuition, and energy.
• They possess a high EQ [emotional quotient],
quotient] and their IQ
is not as important—it's a lifestyle, it's embedded like an
instinct, not something you can turn on and off. At times it
is a blessing and a curse. While many people are dreamers,
a ttrue entrepreneur's
t ' dreams
d are converted
t d into
i t realities
liti
because true entrepreneurs are always creating, always
thinking of ideas, mentally evaluating endless possibilities
and are excited by the new and the next.
Is There a Gene
for Entrepreneurs?

• Neal Thornberry, faculty director of the Babson


Executive Education at Babson College and author of
Lead Like an Entrepreneur: The actual answer is yes and
no. We know we can teach people elements of the
entrepreneurial mindset and skill set, but one thing needs
inducement and the other involves self pperception.
p We can
clearly teach people to identify new business opportunities,
and we can teach them how to differentiate a good idea
from a good opportunity.

• In fact much of what we do at Babson is to teach students


how to think and act like entrepreneurs. So we teach
students how to finance their ideas,
ideas how to assess market
demand, how to scale the business, mitigate risk, etc. But
the passion that entrepreneurs must have to take their
ideas all the way through to creating a viable new business
enterprise
i iis not so teachable.
h bl
Is There a Gene
for Entrepreneurs?

• And the passion we are talking about is for their idea.


• They need either to be in love with it or learn to love it if
they are going to have the perseverance to see it through.
through I
have had many people who had not shown any
entrepreneurial orientation who got switched on by learning
about entrepreneurship.
• The other, less teachable part of entrepreneurship is the
belief that the person has the ability to turn their idea into
a business. We often find people with a g good opportunity,
b they
but h don't
d ' have
h enoughh confidence
fd in themselves.
h l
Education can help here as well, but equally important is
surrounding the would-be entrepreneur with others who
share his/her excitement for the idea.
idea
“Dogs bark at what
they don’t
understand.”
d t d”
-Heraclitus
The Levels of Certainty
Types of Innovation

• Incremental – adding / improving


existing services
• Evolutionary – continuing the evolution of
existing services based on an existing
insight

• Revolutionary – taking your business to a whole


new level based on a fresh insight
Parkinson’s Laws
• 1. 'Expenditure rises to meet income'...

• 2. 'Work expands so as to fill the time


available for its completion'...

• 3. 'The matters most debated in a


y tend to be the minor ones
deliberative body
where everybody understands the issues.'
The Insight Platform
• For (Who is the behavioral target our communication program is
to impact?)

• Who (What is the customer insight that has been identified, and
what is the category motivation that drives that customer or
prospect?)

• Our product is a ... (What is our product or service in the eyes


of the customer or prospect,
prospect that is,
is what is our whole product or
whole brand?)

• That provides ... (What is the key benefit or value the customer
wants and our brand or product can deliver based on our insight
or insights?)

• Unlike ... (Who is the relevant competitor or competitors?) Our


product ... (What is our key point of differentiating relevance?)
Taking an Insight into Action
Examples

• WalMart – Become a leader in retail


by constantly
lowering prices. (Reverse)
• Dell - (Eliminate) the middleman
and deal direct with the
customer.
• Starbucks
St b k – (Magnify)
(M if ) th
the coffee
ff
experience beyond
what
h t was available
il bl
any place else
The Steps to Real Differentiation

1.Make sense in the context Your


difference has to make sense within the
compet-ing arguments of the competition
and your market. Your difference has to
make sense within the environment of
perceived weaknesses and strengths.
Good timing in making your pitch certainly
helps.
2.Find the differentiating idea To be
different is to be not the same. To be
unique
i is
i to
t be
b one off a ki
kind.
d Look
L k for
f the
th
single, unique quality that separates you
from your competitors.
competitors
The Steps to Real Differentiation

3. Have the credentials If your product


difference is valid
valid, then you should be able to
show it. You can't show difference with smoke
and mirrors. You might not be chal-lenged if
you make k Use
U claims,
l i but
b t you shouldn't
h ld 't riski k
that result because it could damage public
opinion.
p
4. Communicate your difference You must
show consumers every aspect of your
marketing
k ti diff
difference. Every
E aspectt off your
communications, from brochures to advertising
to y
your Web presentations,
p , should reflect and
highlight the qualities that make you different.
Blue Ocean Thinking
The Ocean View
Red ocean strategy Blue ocean strategy
• 'Compete
p in existing
g • Create uncontested
market space. market space.
• Beat the competition. • Make the competition
• Exploit existing irrelevant
irrelevant.
demand. • Create and capture
• Make the value/cost
/ new demand.
trade-off • Break the value/cost
• Align the whole tradeoff.
system of a • Align the whole
company's activities system of a
with its strategic company‘s activities in
choice of pursuit of
differentiation or low differentiation and low
cost. cost.
Blue Ocean Defined

• In blue oceans, demand is created rather


than fought over.
over
• There is ample opportunity for growth that
is both
b h profitable
f bl and d rapid.
d
• Competition is irrelevant because the rules
of the game are waiting to be set.
• Instead
stead of
o viewing
e g opportunities
oppo tu t es through
t oug a
lens of existing assets and capabilities,
value innovators ask: 'What if we start
anew?' "
Destroy Paradigms:
Seeing a New Way of Seeing

• Listen to the Radicals


• Look across disciplines
• Question the Routine
• Recognize the Barriers / Are they environmental
or model based
• Destroy the Old Model / Clean sheet of Paper
• Envision Multiple Futures
• Make the opposite of Everything True
Marketing – The Basics
• Marketing – What is it?
– Who are your “ideal” customers? Who should you target first?
– How should the product or service be designed to best meet
the needs of these customers?
– How can you most effectively and profitably reach and convert
these
h customers??
– Ultimately, how can you best create customer value, better
than the competition, at a profit
• Marketing
k is a conversation
– With existing customers (these are the most profitable)
– With potential new customers (what do they want)
– Secondarily distribution partners who are taking your product
or bringing your service to market
• Why
y does it matter?
– Revenue, profitability
– Maximize shareholder value – i.e. you and your financial
backers
Marketing – Overview

Value Delivery Sequence*

Communicate the
Choose the Value Provide the Value
Value

Customer needs Product/service R&D Advertising


assessment
Distribution Selling
g
Customer selection
Pricing Promotion
Value Proposition
definition Service PR
The Marketing
g Mix

*Adapted from Cathy Anterasian and Lynn W. Phillips, “Discontinuities, Value Delivery, and the Share-Returns
Association: A Re-examination of the ‘Share-Causes-Profits’ Controversy,” Marketing Science Institute, 1989.
Marketing – The Basics
• Focus on creating superior value for the customer
– Every
y aspect
p of your
y business should be based upon
p figuring
g g
out what it takes to satisfy customer’s needs
• Basic Process
– What are the market needs – what are the dimensions of
product and service variability and how do they map to
customer segments
– What are your capabilities mapped to these dimensions
– What are competitors capabilities mapped to these dimensions
– Identify segments of customers who value your unique
offering and where there are fewer competitors
– Evaluate the relative attractiveness of each segment – size,
growth and profitability potential
– Design products and services and devise marketing plan to
optimally create value for these segments
Marketing – The Framework
“The 3 Cs”

Identify
Id tif MMarket
k t CUSTOMER COMPANY COMPETITION
Opportunities

Set
SEGMENTATION TARGETING POSITIONING
Strategy

Formulate
Marketing PRODUCT PRICE PROMOTION PLACE
Program

“The 4 Ps”

*Adapted from Cathy Anterasian and Lynn W. Phillips, “Discontinuities, Value Delivery, and the Share-Returns
Association: A Re-examination of the ‘Share-Causes-Profits’ Controversy,” Marketing Science Institute, 1989.
Marketing – The Framework
– This is an iterative, integrated process
– At each step p evaluate the p
pros and cons of alternatives
– First analyze the 3Cs - your customers, competitors and
yourself (company)
– Rank all possible customer segments and targets by:
• Segment size potential and growth
• Competitive intensity - do you outperform the competition?
– How underserved is this segment?
g
– How strong are competitors and how well do their competitive advantages map to
this segment?
• Company fit
– How well do your competitive advantages fit to deliver value in the segment?

– Select segments to target


– Choose a goal, identify impediments to that goal and devise a
solution
– Identify best positioning strategy for targets
– Identify the 4Ps that best facilitate the positioning strategy
Marketing – The 3Cs Explained

• The 3 Cs – Company and Collaborators,


Competition and Customers
– Customers
• Define and identify customers needs and wants
– What are they looking for? What product attributes matter to them?
– Needs are stronger than wants. Ideally, your firm satisfies needs.
• Who are these customers?
– How can the customers be segmented by common needs and wants?
» Demographics (age
(age, class,
class socioeconomic,
socioeconomic gender,
gender geography)
» Psychographics (“attitudes”, interests, opinions and values)
» Behavior and usage patterns
– Rank these customer segments by size, growth, profitability
» Profitability falls out from pricing sensitivity – is it a need or a want – and
d
degree off substitutes
b tit t
• How do the customers make purchase decisions?
– Alone? If not, who are the purchase decision influencers?
• Rank segments
g by
y considering
g customer lifetime value
– Generate an estimate of cash flows over the average lifetime of a
customer by considering:
» Cost to acquire, likely frequency of purchases for different product usages,
average size per purchase for each type of usage, annual customer loss due
to switching to a competitor
Marketing – The 3Cs Explained

• The 3 Cs – Company and Collaborators,


Competition and Customers
– Company and Collaborators
• Define and identify your company’s competitive advantages
– Competitive advantages are scarce resources or competencies that are
a) unique and different and b) enable the company to create value for
customers better and/or less expensively than the competition
» E.g.
g ppatented technology,
gy, more efficient manufacturing
g process,
p , unique
q
culture, ownership of ideal real estate, etc.
– Ideally they are difficult to replicate, sustainable in the medium to long
term and are suited for a broad set of market opportunities
• How do these competitive advantages help to deliver value
to customers by satisfying their needs?
– Consider mapping company competitive advantages to ability to deliver
better p
product attributes
• Who are the collaborators you need to build your business?
– Are they incentivized to drive toward the same goal as you?
Marketing – The 3Cs Explained

• The 3 Cs – Company and Collaborators,


Competition and Customers
– Competition
• What is the industry structure like?
– Lots of direct and indirect competitors or just a few? Ideally a few.
– Lots of substitute products or services or just a few? Ideally a few.
– What is the power of your suppliers – can you get the inputs required
to make your product or service from only a few or many suppliers?
Ideally many small suppliers.
– What is the power of your customers – are you selling to a few big
customers (B2B) or to many small customers? Ideally many small
customers.
customers
– How intense is pricing rivalry? Ideally you are delivering a
differentiated new product to customers that really need it so pricing
rivalry and sensitivity would then be low.
– All the above tells you what your industry looks like – is there room for
profitability and how many competitors can the industry support in the
long run?
Marketing – The 3Cs Explained

• The 3 Cs – Company and Collaborators,


Competition and Customers
– Competition
• Competitive advantages and disadvantages
• Strengths and weaknesses, opportunities and threats
• Relative and absolute value proposition
• What are the indirect alternatives – now and in future?
– Pros and cons of each indirect alternative – assess level of risk
• Competitive dynamics
– Pure competition
– Frequency of changes in competitive landscape
– Coopetition – compete in one segment, cooperate/partner in others
Marketing – STP
• STP – Segmentation, Targeting and Positioning
– Segmentation
• Determine
D t i possible
ibl market
k t segments
t
– Customer segments must perceive, value and use the product the same
– How can the customers be segmented by common needs and wants?
» Demographics (age, class, socioeconomic, gender, geography)
» Psychographics (“attitudes”, interests, opinions and values)
» Behavior and usage patterns (reason for, frequency of, timing of use)
– Warning: Don’t segment too finely or not finely enough – balance is critical!
– Profile these customer segments by size, growth, profitability
» Size related to number of potential
» Profitability falls out from pricing sensitivity – is it a need or a want – and degree of
substitutes
– Targeting
• Evaluate relative attractiveness of each segment based on:
– Segment size, growth and profitability
– Company fit “divided
divided by”
by competitor strength and presence
• Select the most attractive segments to be your targets
– Can be one segment or multiple segments depending on size of the opportunity
and need to be focused
– Positioning
• Develop a positioning concept for each target segment
• Make sure you can back it up
• Make sure different positioning concepts are not inconsistent
Marketing – The 4Ps Explained
• 4Ps – executing the marketing strategy
– Product
• What set of product attributes are ideal for meeting the
needs of each targeted segment of customers
– Price
• Think about the pricing strategy that optimizes profitability.
• Cost-based pricing vs. value-based pricing
• Consider:
– the relative cost structures of your competitors
– the value of the competitor’s products to customers in the targeted
segment relative to yours
– How can and will your competitors likely respond to your pricing
moves?
– Price at parity to capture market share
– Price at a premium to increase profit per customer and per transaction
at share expense
– Lower price can be affiliated with lower quality for some customers
– Its easier to price high and move lower than the reverse
Marketing – The 4Ps Explained
• 4Ps – executing the marketing strategy
– Promotion
• How can you best reach each target segment?
– Think Advertising Media
» Direct mailings
» Broadcast
d - TV, radio
d
» Internet
– Think Sponsorships and Referrals
– Special Event Advertising

– Place
• How can you most efficiently get the product to the desired
target segment?
– Think distribution channels
» Single or two tiered distribution model
» High and low value add distributors
» Retail intermediary
» Wholesaler + retail intermediary
– Consider: Each intermediary takes a slice of the value created away
from you
Marketing – Using Market Research

• Function that links the customer to the


marketer through information
• Information used to:
– Segment markets and position brands
– Identify and define marketing
opportunities and problems
– Help focus on product’s benefits and not
features
– Generate, refine and evaluate marketing
actions
– Monitor marketing performance
The Marketing Research Process

Formulate the problem/opportunity The Most Important Step!

Determine research design


g

Design data collection method

Select a sample and collect data

Analyze and interpret data

Prepare the research presentation


Marketing – Data Sources

• Census statistics: www.census.gov


• VALs survey: www.sri.com/vals/valsindex.html
www sri com/vals/valsindex html
• American Demographics Magazine:
• www.americandemographics.com
www americandemographics com
• Gallup: www.gallup.com
• Harris: www
www.harris.com
harris com
• Media Metrix: www.mediametrix.com
NU Venture Challenge Timeline

Feb. 28 Sign-up deadline

Fi t R
First Round
dddeadline;
dli business
b i plan
l abstracts
b t t d due
Apr. 13

Apr. 16 Semi-finalists announced

Semi-final Round - teams p


present 3-minute elevator p
pitch +
Apr. 21 7 minutes Q&A and finalists announced at end of day

May 12 Finall R
Fi Round
d consisting
i ti off fi
finalist
li t tteams giving
i i a 15 minute
i t
presentation + 15 minutes of Q&A & Gala
NU Venture Challenge Timeline

• Disclaimer
– Some of this material is pulled from “Marketing
Marketing
Management 12e”; authors are Philip Kotler
and Kevin Lane Keller